LNG Market and Value Chain

Natural gas plays a growing role in meeting global energy demand, driven by the need for reliable, flexible and lower-emission energy sources. As the cleanest-burning fossil fuel, it is increasingly used to support electricity generation, industrial activity and household energy needs.

Liquefied natural gas (LNG) enables natural gas to be transported over long distances, connecting gas-producing regions with global markets. Over the past decades, liquefied natural gas has become a key component of the global energy mix, with demand expected to continue growing, particularly in regions seeking to diversify their energy supply and reduce emissions. This growing demand is supported by continuous improvements in technology, infrastructure and safety standards across the industry.

In this context, liquefied natural gas supports both energy security and the energy transition. Papua New Guinea is strategically located to serve these markets, and Papua LNG is designed to offer a competitive, lower-emissions supply aligned with evolving demand.

LNG in PNG

Papua New Guinea has emerged as a significant LNG producer, with oil and gas contributing over 19% of national GDP. The country benefits from substantial gas reserves and a growing portfolio of projects, led by the operational PNG LNG facility and the upcoming Papua LNG development. Supported by major international energy companies and national stakeholders, liquefied natural gas production is primarily exported to Asian markets under long-term agreements, while also contributing to domestic energy supply. This combination of resource potential, strategic location and ongoing project development positions Papua New Guinea as an important player in the global LNG landscape.

LNG Value Chain

The LNG value chain connects natural gas resources to end users through a series of integrated steps, ensuring safe, efficient and reliable delivery of energy.

Across all stages, the liquefied natural gas industry applies strict international standards, advanced technologies and comprehensive training programs to ensure high levels of safety, reliability and operational performance.

Rebid and Design Evolution

The Papua LNG project has undergone a significant design optimization process to enhance competitiveness and long-term value. Following the front-end engineering design phase, initial contractor offers exceeded cost expectations. A rebid phase was therefore launched, focusing on simplifying the development concept and increasing contractor competition.

This included streamlining technical solutions, adapting infrastructure design and leveraging synergies with existing operators. The project also expanded its pool of EPC contractors. This approach has resulted in more competitive and robust proposals, strengthening the project’s economic resilience.

Allocation of Responsibilities

The Papua LNG project is delivered through a collaborative framework involving international partners, national stakeholders and financial institutions. TEP PNG, as operator, leads project development and execution. It works with co-venturers including ExxonMobil, Santos and ENEOS Xplora.

National entities, including Kumul Petroleum and MRDC, represent State and landowner interests and participate in key activities such as LNG marketing. The Government of Papua New Guinea provides the regulatory framework, including permits and licenses, and supports national content and community engagement.

International lenders, including export credit agencies and commercial banks, support project financing. Together, these stakeholders ensure coordinated, responsible development and long-term value creation.